Twitter Coming of Age for Investors

This week seems to be Twitter on Wall Street week. On Monday I read an article speculating that Twitter may package its social data as a financial services product to sell to professional traders. Then today I got an email from TD Ameritrade announcing a new service called Social Signals that offers retail investors Twitter-derived statistics about companies, their brands and consumer sentiment for any ticker symbol. We’ve also been hearing for some time about hedge funds monitoring Twitter with algorithms to determine when chatter suggests a stock or larger macro trend may be impacted.

Financial institutions already distribute literally thousands of real-time data feeds to their traders (using technologies like Solace). These include everything from the most popular exchange feeds for every imaginable asset class to the most obscure technical analysis metrics. This seems like a good business opportunity for Twitter that leverages assets they already own. I am sure there would be sufficient demand to justify what should be a smallish effort on their part.

Then, of course, we’ll see other traders start gaming the system by generating topical tweets that attempt to influence the algorithms that are buying and selling using the Twitter feeds. And the circle goes round and round,  Ouroboros chasing his tail…